IRS Delays Overseas Bank Reporting Rule Criticized by Aegon

The Internal Revenue Service is giving overseas banks an additional year before they will have to make any withholdings from U.S. customers who fail to disclose enough identifying information to U.S. tax collectors.

The second round of IRS guidance issued today on the Foreign Account Tax Compliance Act, or FATCA, doesn’t require banks to make 30 percent withholdings on non-compliant U.S. customers until Jan. 1, 2014. Other withholdings on gross proceeds and income that might be indirectly sourced to the U.S. won’t start until Jan. 1, 2015.